Question

Discuss the prospects for the value of Greece over the next 12 months. Use data and cite sources and pay attention to English mechanics to forecast an appreciation or depreciation or depreciation of the country's currency relative to the USD in the next year and defend your forecast.

Answer 1

Greece will expect GDP to rise marginally to 2.2% as Consumption grows and Aggregate demand rises. The exports however set to decline due to lack of manufacturing activities over next 12 months.

Reintegration into European Framework will give boost as austerity measures have been implemented well. Accumulated cashflow will serve as buffer for financialization of public needs and hence liquidity will be well balanced in market which is strong indicator of growth in real GDP.

Hence currency looksfor appreciation versus US dollar also because of no Brexit Deal Expected by May. Moroeover imports are well under control and hence currency will appreciate.

Sources: OECD, Greece Economic forecasting Summary, As On November 2018.